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24–084 PDF 2005

ELUSIVE ANTIDOTES: PROGRESS DEVELOPING

CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND

NUCLEAR COUNTERMEASURES

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY,

EMERGING THREATS, AND INTERNATIONAL

RELATIONS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

JUNE 14, 2005

Serial No. 109–83

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

GINNY BROWN-WAITE, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON NATIONAL SECURITY, EMERGING THREATS, AND INTERNATIONAL

RELATIONS

CHRISTOPHER SHAYS, Connecticut, Chairman

KENNY MARCHANT, Texas

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

JON C. PORTER, Nevada

CHARLES W. DENT, Pennsylvania

DENNIS J. KUCINICH, Ohio

TOM LANTOS, California

BERNARD SANDERS, Vermont

CAROLYN B. MALONEY, New York

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

STEPHEN F. LYNCH, Massachusetts

BRIAN HIGGINS, New York

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

LAWRENCE J. HALLORAN, Staff Director and Counsel

KRISTINE FIORENTINO, Professional Staff Member

ROBERT A. BRIGGS, Clerk

ANDREW SU, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on June 14, 2005 ............................................................................... 1

Statement of:

Hanna, Dr. Michael G., Jr., Chief Scientific Officer, Intracel; and Dr.

James H. Davis, executive vice president and general counsel, Human

Genome Sciences, Inc. .................................................................................. 95

Davis, Dr. James H. .................................................................................. 102

Hanna, Dr. Michael G., Jr. ....................................................................... 95

Klein, Dale, Assistant to the Secretary of Defense for Nuclear, Chemical

and Biological Defense Programs, Department of Defense; Dr. Anthony

S. Fauci, Director, National Institute of Allergy and Infectious Diseases, National Institute of Health; Stewart Simonson, Assistant Secretary for Public Health, Emergency Preparedness, Department of

Health and Human Services; John Vitko, Jr., Director, Biological Countermeasures Portfolio, Science and Technology Directorate, Department

of Homeland Security; and Ronald J. Saldarini, Scientific Consultant,

Institute of Medicine ..................................................................................... 5

Fauci, Dr. Anthony S. ............................................................................... 21

Klein, Dale ................................................................................................. 5

Saldarini, Ronald J. .................................................................................. 74

Simonson, Stewart .................................................................................... 48

Vitko, John, Jr., ......................................................................................... 65

Letters, statements, etc., submitted for the record by:

Davis, Dr. James H., executive vice president and general counsel,

Human Genome Sciences, Inc., prepared statement of ............................. 104

Fauci, Dr. Anthony S., Director, National Institute of Allergy and Infectious Diseases, National Institute of Health, prepared statement of ....... 23

Hanna, Dr. Michael G., Jr., Chief Scientific Officer, Intracel, prepared

statement of ................................................................................................... 98

Klein, Dale, Assistant to the Secretary of Defense for Nuclear, Chemical

and Biological Defense Programs, Department of Defense, prepared

statement of ................................................................................................... 8

Kucinich, Hon. Dennis J., a Representative in Congress from the State

of Ohio, prepared statement of .................................................................... 121

Ruppersberger, Hon. C.A. Dutch, a Representative in Congress from the

State of Maryland, prepared statement of .................................................. 125

Saldarini, Ronald J., Scientific Consultant, Institute of Medicine, prepared statement of ........................................................................................ 76

Sanders, Hon. Bernard, a Representative in Congress from the State

of Vermont, prepared statement of .............................................................. 129

Shays, Hon. Christopher, a Representative in Congress from the State

of Connecticut, prepared statement of ........................................................ 3

Simonson, Stewart, Assistant Secretary for Public Health, Emergency

Preparedness, Department of Health and Human Services, prepared

statement of ................................................................................................... 50

Vitko, John. Jr., Director, Biological Countermeasures Portfolio, Science

and Technology Directorate, Department of Homeland Security, prepared statement of ........................................................................................ 67

(1)

ELUSIVE ANTIDOTES: PROGRESS DEVELOPING CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND NUCLEAR COUNTERMEASURES

TUESDAY, JUNE 14, 2005

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON NATIONAL SECURITY, EMERGING

THREATS, AND INTERNATIONAL RELATIONS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:06 p.m., in room

2154, Rayburn House Office Building, Hon. Christopher Shays

(chairman of the subcommittee) presiding.

Present: Representatives: Shays, Marchant, Platts, Duncan,

Turner, Kucinich, Van Hollen, Ruppersberger, and Higgins.

Staff present: Lawrence Halloran, staff director and counsel;

Kristine Fiorentino, professional staff member; Robert A. Briggs,

clerk and professional staff member; Andrew Su, minority professional staff member; and Jean Gosa, minority assistant clerk.

Mr. SHAYS. The Subcommittee on National Security, Emerging

Threats, and International Relations’ hearing entitled, ‘‘Elusive

Antidotes: Progress Developing Chemical, Biological, Radiological

and Nuclear Countermeasures,’’ is called to order.

First, let me apologize for keeping you waiting. It is not my practice to keep any of you waiting, you have very important things to

do.

More than a decade after U.S. armed forces faced exposure to

Saddam’s chemical arsenal and 4 years after the anthrax attacks

here at home, the development of medical countermeasures against

unconventional weapons remains an elusive goal. A multitude of

Federal offices and programs pursue separate, shifting, often competing priorities without disciplined linkage to a strategy to address the most pressing threats.

By one count last year, 75 high level Federal officials in seven

Cabinet departments were responsible for biodefense policies, program execution or budgets. The Department of Health and Human

Services, the Department of Homeland Security, the Department of

Defense, the Department of Agriculture, the Department of Commerce, the Department of State and the Environmental Protection

Agency all have some responsibility for the Nation’s defenses

against chemical, biological, radiological assaults.

To date, this littered landscape has not been fertile soil for the

growth of needed countermeasures against the threats posed by the

pathogens, toxins, chemicals and isotopes known to be within the

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grasp of terrorists. Five years ago, the Defense Science Board saw

the need for 57 vaccines, drugs and diagnostics to meet the threat.

Today, we have just two of those in hand, both based on old technologies.

The Department of Defense specifically, the Joint Vaccine Acquisition Program, offers a sadly illustrative example of the difficulties

plaguing the broader Federal effort. A 2004 study by the Institute

of Medicine found the DOD biodefense program fragmented and

often prey to competing priorities. Launched in 1997 with $322 million, the JVAP has spent that much and more. Yet lists of JVAP

‘‘accomplishments’’ provided to the subcommittee include just one

recently licensed therapeutic, no completed vaccines and two target

vaccine programs terminated after significant expenditures.

Without question, countermeasure development is an expensive,

technically challenging process that cannot be forced to yield results on an arbitrary timetable. The current approach lacks cohesiveness and urgency. Those trying to advance medical countermeasures face a torturous labyrinth of Federal fiefdoms into which

billions disappear, yet very few antidotes have yet to emerge.

In October 2001, this subcommittee held a field hearing on the

development of medical countermeasures against biological warfare

agents. We met across the street in the Department of Health and

Human Services headquarters building, because the Capitol complex was closed for anthrax testing and remediation. We were told

aggressive steps were being taken to defend both civilian and military personnel against anthrax, smallpox, botulinum toxin and

other likely threats.

Today we find the biodefense pipeline still producing little more

than promises of cures to come. Project BioShield represents an essential mechanism to streamline the countermeasure development

end game, acquisition, but it can do little to accelerate the glacial

process of moving vaccines, drugs and other therapies from basic

research to final formulation and licensure. That is a function of

leadership, coordination and strict adherence to a threat-based

strategy.

We asked our witnesses to describe how greater focus and momentum can be brought to this complex process. They bring world

class credentials and unmatched experience to our discussion and

we look forward to their testimony and we thank them for their

presence here today.

At this time, the Chair would recognize Mr. Marchant.

[The prepared statement of Hon. Christopher Shays follows:]

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Mr. MARCHANT. I don’t have any opening statement. I am happy

to be here.

Mr. SHAYS. Thank you. I appreciate the gentleman’s participation and his help with the work of this subcommittee.

Let me now take care of some business. I ask unanimous consent, given that we have a quorum, that all members of the subcommittee be permitted to place an opening statement in the

record and the record remain open for 3 days for that purpose.

Without objection, so ordered.

I ask further unanimous consent that all witnesses be permitted

to include their written statements in the record and without objection, so ordered.

At this time, I will introduce the first panel. We have Dr. Dale

Klein, Assistant to the Secretary of Defense for Nuclear, Chemical

and Biological Defense Programs, Department of Defense; Dr. Anthony S. Fauci, Director, National Institute of Allergy and Infectious Diseases, National Institute of Health; the Honorable Stewart

Simonson, Assistant Secretary for Public Health, Emergency Preparedness, Department of Health and Human Services; Dr. John

Vitko, Jr., Director, Biological Countermeasures Portfolio, Science

and Technology Directorate, Department of Homeland Security;

and Dr. Ronald J. Saldarini, Scientific Consultant, Institute of

Medicine.

As is the custom, we swear our witnesses and I would ask you

to stand.

[Witnesses sworn.]

Mr. SHAYS. We prefer that your testimony be closer to 5 minutes

but we will roll it over for another 5 minutes and would like you

to stop within that time because we have a number of panelists.

Dr. Klein.

STATEMENTS OF DALE KLEIN, ASSISTANT TO THE SECRETARY

OF DEFENSE FOR NUCLEAR, CHEMICAL AND BIOLOGICAL

DEFENSE PROGRAMS, DEPARTMENT OF DEFENSE; DR. ANTHONY S. FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES, NATIONAL INSTITUTE

OF HEALTH; STEWART SIMONSON, ASSISTANT SECRETARY

FOR PUBLIC HEALTH, EMERGENCY PREPAREDNESS, DEPARTMENT OF HEALTH AND HUMAN SERVICES; JOHN

VITKO, JR., DIRECTOR, BIOLOGICAL COUNTERMEASURES

PORTFOLIO, SCIENCE AND TECHNOLOGY DIRECTORATE,

DEPARTMENT OF HOMELAND SECURITY; AND RONALD J.

SALDARINI, SCIENTIFIC CONSULTANT, INSTITUTE OF MEDICINE

STATEMENT OF DALE KLEIN

Dr. KLEIN. Chairman Shays and members of the subcommittee,

I am honored to appear before your subcommittee again to address

your questions regarding the Department’s efforts to develop and

acquire countermeasures to chemical, biological, radiological and

nuclear threats. As you indicated, I am the Assistant to the Secretary of Defense for Nuclear, Chemical and Biological Defense

Programs.

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Today, I will address the Department’s defense process to identify, prioritize, develop and acquire countermeasures to the threats

we face today and future threats. I will also provide an update on

some of the accomplishments of the medical research program and

the Joint Vaccine Acquisition Program. Finally, I will highlight

some of our interagency cooperative efforts and following my comments, I welcome questions the subcommittee might have and I

will do the best I can to answer them.

In accordance with congressional authority, I serve as the focal

point, overseeing the Department’s chemical and biological defense

research, development and acquisition programs. The Secretary of

Defense recently provided direction to enhance the chemical and biological defense posture. The resulting study generated several options for increased investment based on these new requirements

and accompanying risk.

Based on the study findings, senior leaders agreed to increase the investment for WMB countermeasures by $2.1 billion for the

fiscal years 2006–2011. The increase included $1.3 billion for

Chemical and Biological Defense Program. This investment strategy begins in fiscal year 2006 with $1.5 billion for the President’s

budget request.

In addition to this study, the Director of Program Analysis and Evaluation identified an additional $100 million in fiscal year 2006

for the Chemical and Biological Defense Program to address biological warfare and medical countermeasure initiatives. These medical countermeasure initiatives will apply transformational approaches which leverage our genomics, proteomics consistent biology data exploitation.

The Chemical and Biological Defense Program has made

progress in several areas of medical defense. In 2003, the first successful application of the new animal efficacy rule occurred with

Food and Drug Administration approval of pyridostigmine bromide

to increase survival exposure to soman nerve agent poisoning.

In March 2005, a contract award was made for development of

a chemical agent bioscavenger for a pre or post-exposure treatment

of nerve agent exposure. In February of this year, the FDA approved the DOD Vaccinia Immune Globulin used to treat adverse

events following smallpox immunization. In early 2005, clinical

trials began for both a multivalent botulinium vaccine for stereotypes A and B and a plague vaccine. In July clinical trials will

begin for a Venezuelan Equine Encephalitis vaccine.

The DOD Chemical and Biological Defense Program activities

are informally coordinated with the Department of Health and

Human Services. Stewart Simonson and I meet on a regular basis

with the National Institute of Allergy and Infectious Diseases with

Dr. Fauci and the Centers for Disease Control and Prevention.

DOD and the DHS are currently working on an interagency

agreement regarding cooperation on medical countermeasure development. It is important to note that some of the medical countermeasures currently being developed through NIAID for the national stockpile have their technology bases and programs which

initially began in the Department of Defense. Examples of this are

the next generation anthrax vaccine and self-culture derived smallpox vaccine.

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A critical aspect of interagency coordination is DOD’s support for

Project BioShield. The first product that DOD may be able to transition to the Department of Health and Human Services under

Project BioShield is a plasma-derived, bioscavenger for pre and

post-exposure treatment of nerve agent exposure. The DOD has

awarded an initial contract for a Phase I clinical trial at which

time DHHS would be expected to assume advanced development

through FDA licensure under the BioShield authority.

The joint project manager for the Chemical and Biological Medical System is responsible for systems acquisition, production and

medical countermeasures against chemical and biological agents,

including the Joint Vaccine Acquisition Program. In February of

this year, the Under Secretary of Defense for Acquisition Technology and Logistics provided you with a detailed update on the

JVAP acquisition program.

The Chemical and Biological Events Program budget provides a

balanced investment strategy which includes the procurement of

capabilities to protect U.S. forces in the near term, investment in

advanced development to protect U.S. forces in the mid term and

investment in the science and technology base to protect U.S. forces

in the far term and beyond.

As we look to the future, our main concern is a bioengineered

threat to our men and women in uniform. Our main task continues

to be to provide the best technology to the war fighter in the most

expeditious and efficient manner possible. Therefore, my office will

continue to focus on providing the technology necessary to counter

the threats posed by chemical and biological agents, especially the

biological agents.

Thank you for the opportunity to address these issues and I will

attempt to answer any questions and concerns the committee

might have.

[The prepared statement of Dr. Klein follows:]

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Mr. SHAYS. Thank you, Dr. Klein.

Dr. Fauci.

STATEMENT OF DR. ANTHONY S. FAUCI

Dr. FAUCI. Thank you for giving me the opportunity to discuss

with you this afternoon the NIH biomedical research effort in the

development of countermeasures against three major threats, biological, mainly microbes and toxins; radiologic and nuclear countermeasures as well as chemical countermeasures.

We began this endeavor over 3 years ago with the biological and

the medical countermeasures including radiologic, nuclear and

chemical based on the fundamental basic scientific approach that

has been adapted at the NIH for decades in our research in other

areas. This includes most recently an expansion of the research capacity, both intellectual capacity of individuals involved as well as

physical structure and laboratories. All of these are directed at the

development of countermeasures in the form of diagnostics, vaccines and therapeutics.

The greatest success thus far has been in an area in which we

have had decades of experience in confronting emerging and reemerging infectious diseases at our NIH programs. In the end of

2001 and early 2002, following the anthrax attacks, we developed

a comprehensive, strategic plan and a research agenda for Category A as well as Category B and C agents. In addition, we have

developed and published now for your perusal the progress reports

for the Category A agents and most recently, we have included the

progress reports for the Category B and C agents.

I would like to spend just a moment or two summarizing some

of these accomplishments that have occurred over the past 3 years.

First, in the arena of smallpox, you may recall right after the anthrax attack when we examined our stockpile, we had about

15,000–18,000 doses which with dilution brought us up to 90,000.

Now, with the techniques that were developed and Dr. Klein just

mentioned, we have over 300 million doses of smallpox. In addition,

we are working on clinical trials in the next generation, safer,

modified vaccinia Ankara as well as antiviral drugs against smallpox.

As was mentioned, the anthrax situation is based on research

that is involved in the recombinant protective antigen which has

now been contracted for the stockpile through Project BioShield. In

addition, we are developing monoclonal and polyclonal antibodies.

We have success with Ebola. The Ebola vaccine developed at NIH

has proved 100 percent effective in monkeys in protecting them

from a challenge. We have just completed a Phase I trial in humans showing it to be safe and immunogenic. Botulism toxin, we

are accelerating the development of antibodies, particularly

monoclonal antibodies and influenza, which is a Category C agent,

we are now well into clinical trials for the H–5 N–1 pandemic flu

threat that we now face in Asia. This work is built upon the decades of experience with emerging and a reemerging microbes.

With regard to nuclear countermeasures, this is one that is not

as mature in the sense of development of countermeasures from a

new standpoint as has the microbes because of the fact this was

fundamentally a cold war issue that was developed through the DeVerDate 11-MAY-2000 13:11 Dec 06, 2005 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 D:\DOCS\24084.TXT HGOVREF1 PsN: HGOVREF1
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partment of Defense and over the last several years following the

dissolution of the cold war threat, we have had to revitalize the

program. We are doing that in collaboration with the Department

of Defense.

We have a strategic plan for radiologic and nuclear countermeasure development which will be available and was signed off

just last night and will be available to you. It includes our intermediate as well as our long range goals. The low hanging fruit is

to expand the licensure for material that is already in the strategic

national stockpile as well as to develop centers of excellence.

In addition, we are developing protectants as well as response

agents and importantly a program to use adult stem cell reconstitution of bone marrow suppression following a radiologic attack.

We are using the expertise that was developed in fighting cancer

in which one gets exposed to radiation deliberately to kill cancer

cells, there is the effect on the bone marrow which we are now

using that expertise to try and develop reconstitution.

The same can be said about chemical countermeasures. We have

a strategic plan that is not as mature as the radio-biological one.

This will likely be available at the end of this calendar year and

it is based on the same situation as I mentioned in looking at what

we already have in the strategic stockpile and trying to expand the

FDA-approved usage of that.

We are doing this in very strong partnership with the U.S. Army

Medical Research Institute of Chemical Defense. Again, we have

immediate, intermediate and long term goals. The long term goal

is to ultimately develop countermeasures that can be used both to

detect as well as to counter the effects of tissue damage due to

chemical weapons.

Finally, on this last poster, I want to mention the coordination

and the collaboration among the various agencies to which the

chairman alluded. At the NIH, we coordinate through my institute

by a Biodefense Research Coordinating Committee. That is within

the NIH institutes as a whole. Much, if not all of the biological microbial is done through the Infectious Disease Institute but when

you get into chemical and radiologic, we have a number of the

other Institutes at the NIH and we coordinate that through our

committee.

The coordination within HHS as you will hear from Assistant

Secretary Stewart Simonson takes place in his office at the Office

of Public Health Emergency Preparedness and the more global

Federal Government coordination among agencies including DHS,

DHHS, DOD and others takes place through the Homeland Security Council, particularly through the Weapons of Mass Destruction

Medical Countermeasures Subcommittee.

I am finished with the oral statement. I would be happy to answer questions later.

[The prepared statement of Dr. Fauci follows:]

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Mr. SHAYS. Thank you.

We have four doctors and an honorable. Mr. Secretary.

STATEMENT OF STEWART SIMONSON

Mr. SIMONSON. Thank you.

Good afternoon. I am Stewart Simonson, Assistant Secretary at

HHS for Public Health Emergency Preparedness. I appreciate the

opportunity to share with you information on the Department’s

progress on research development and acquisition programs for

medical countermeasures and specifically implementation of the

Project BioShield Act of 2004.

HHS shares the subcommittee’s desire for an effective and efficient interagency process to identify, prioritize and acquire medical

countermeasures to address chemical, biological, radiological and

nuclear threat agents. We also share the subcommittee’s concern

that this process needs to be linked to validated threats.

The events of September and October 2001 made it very clear

that terrorism is a serious threat to our Nation and to the world.

The Bush administration and Congress responded forcefully to this

threat by strengthening our medical and public health capacities to

protect our citizens from these attacks. To encourage the development of new medical countermeasures against threat agents and to

speed their delivery, President Bush in his 2003 State of the Union

Address proposed, and Congress enacted, Project BioShield. The

$5.6 billion, 10 year, special reserve fund was created to assure developers of medical countermeasures that funds would be available

for the Government to purchase critical products.

Since enactment, my office has moved aggressively to fill immediate gaps in our countermeasures. A genuine sense of urgency informs all of our homeland security work at HHS but it is important

to note that the successful development and manufacture of safe

and effective countermeasures requires an investment of both

money and time. No matter how hard we work or how much money

we spend, some steps in the process cannot be rushed.

There is a complex spectrum of efforts needed along the research

and development pipeline to produce a usable medical product

countermeasure. Defining specifications for a needed countermeasure often reveals few, if any, candidates in the pipeline. To

date, we have been fortunate that some of our highest priority

needs for medical countermeasures could be addressed using the

available, advanced development products in the pipeline.

However, research and early development efforts, even when

robustly funded, often take years before a concept is mature

enough for advanced development. It is only when a product has

reached the advanced development stage that Project BioShield

provides a meaningful incentive for manufacturers the product the

rest of the way.

In determining the requirements for and elaborating options on

medical countermeasure acquisitions, the focal point for U.S. Government interagency efforts is the Weapons of Mass Destruction

Countermeasures Subcommittee. HHS, along with representatives

from the Department of Homeland Security and the Department of

Defense, chair the WMD Subcommittee and stakeholders from

throughout the Government are represented on its working groups.

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In setting priorities for medical countermeasure acquisitions

under BioShield, the WMD Subcommittee considers a number of

factors. The credibility and immediacy of the threat are driving factors and our informed by material threat assessments conducted by

DHS. We also consider the current and projected availability of appropriate medical countermeasures as well as the target population

for which the countermeasure would be used. In addition, logistical

issues are considered such as the feasibility of deployment in public

health emergencies, shelf life, storage and maintenance requirements.

Project BioShield also requires a number of findings by the Secretaries of Homeland Security and HHS prior to an acquisition

commencing. These findings include three determinations: first,

that there is a material threat against the U.S. population sufficient to affect national security; second, that the medical countermeasures are necessary to protect the public health from the material threat; and third, that acquiring a specific quantity of a particular countermeasure, using the special reserve fund, is appropriate. These determinations are followed by a joint recommendation to the White House by the two Secretaries. If approved, Congress is notified and HHS executes the acquisition program.

The process that I have outlined has been successfully implemented through contract award three times since the enactment of

Project BioShield less than a year ago. HHS has completed contract

awards for acquisitions of next generation recombinant protective

antigen anthrax vaccine, the current generation licensed anthrax

vaccine, and pediatric formulation of potassium iodide. Additionally, the acquisition process is in the final execution phases for several other needed medical countermeasures including anthrax

therapeutics, botulinum antitoxin and next generation smallpox

vaccine.

This robust interagency process mines the expertise in the scientific and intelligence communities to define requirements for

medical countermeasures and enables policymakers to identify and

evaluate acquisition options to address immediate and future

needs.

In closing, let me say that HHS has a clear mandate from President Bush and Congress to lead the charge in medical countermeasure development. We have already made important strides to

address the public health needs of the Nation but more needs to

be done. I look forward to working with you and the subcommittee

to address the challenges of CBRM preparedness and its importance to public health.

I look forward to answering your questions.

[The prepared statement of Mr. Simonson follows:]

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Mr. MARCHANT [presiding]. Thank you, Mr. Secretary.

The chairman had to attend a Rules Committee meeting and I

will be chairing for a while.

At this time, I will recognize Dr. Vitko.

STATEMENT OF JOHN VITKO, JR.

Dr. VITKO. Good afternoon. Thank you very much for inviting me

here to speak to you today on DHS’s role in this process.

We at DHS do not develop medical countermeasures but play a

critical role in informing and guiding the prioritization of those

medical countermeasures. I would like to cover four key steps in

that process today: threat assessments and determinations conducted specifically to guide Project BioShield, a broader set of risk

assessments, a strategy for addressing engineered threats in partnership with and led by the Department of Health and Human

Services and scientific studies to better inform these assessments.

As you know, the Project BioShield Act of 2004 charges the Secretary of Homeland Security with the responsibility to determine

which biological, chemical, radiological or nuclear threats constitute a material threat to our Nation’s security. To fulfill this responsibility, the Department of Homeland Security Science and

Technology Directorate, in partnership with our Information Analysis and Infrastructure Protection Directorate, has been conducting

formal threat assessments on the agents of greatest concern to establish plausible, high consequence scenarios. These assessments

are then used by the Secretary of DHS in determining whether to

issue material threat determination and by HHS and the Interagency Weapons of Mass Destruction Medical Countermeasures

Subcommittee in determining the need for and the requirements of

any new medical countermeasures.

To date, the Secretary of the Department of Homeland Security

has issued material threat determinations for four agents: anthrax,

smallpox, botulinum toxin and radiological nuclear devices. Additional assessments are underway for plague, tularemia, viral hemorrhagic fevers and chemical nerve agents and will be completed

this fiscal year.

DHS has an even broader responsibility in the President’s strategy for biodefense for the 21st century. In this strategy, we are

charged with conducting formal, periodic risk assessments in coordination with other departments and agencies to guide the

prioritization of the Nation’s ongoing biodefense activities not just

medical but also including such areas as surveillance and detection,

decontamination and restoration and forensics.

These risk assessments factor in technical feasibility of a broad

range of biological threats. The vulnerability of different portions

of our society to those threats and the resulting consequence of any

such attacks. The first such formal risk assessment is due in the

winter of 2006 and will address all Category A and B agents from

the Centers of Disease Control Prevention and Threat List, some

Category C agents and a number of potential engineered threats.

Recognizing that the rapid advances in biotechnology demand

that we also consider the possibility of engineered threats, we have

partnered with HHS and others in formulating and implementing

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gether, we have developed an informed estimate of the types of

emerging threats that might be within the ability of a terrorist organization to develop over the near, mid and longer terms and

have laid out a strategy for addressing them. The strategy emphasizes ongoing technology watch and risk assessments, rapid surveillance and detection capabilities for engineered threats and expanded range of medical countermeasures and an integrated concept of operations for identifying and responding to emerging or engineered threats.

The threat or risk assessments described above are performed

with the best available information. However, there are large uncertainties, sometimes factors of 10 to 100 in some of the key parameters and hence in the associated risks. In one case, it can be

the minimum amount of agent needed to infect a person and in another case, it can be the time that such an agent remains viable,

that is capable of causing an infection in the air, food or water; and

in a third, it can be the effect of food processing or water treatment

of the agent’s viability.

The Department of Homeland Security has established a National Biodefense Analysis and Countermeasure Center to conduct

laboratory experiments needed to close these knowledge gaps. To

support this and new facilities being designed and constructed on

the National Interagency Biodefense Campus at Fort Detrick, MD.

Pending completion of this facility in fiscal year 2008, we have established an interim capability with other Government and private

laboratories to begin this vital work.

In summary, the Department of Homeland Security Science and

Technology Directorate, in coordination with its Federal partners is

conducting a threat and risk assessment critical to prioritizing the

Nation’s near and long term medical countermeasure development.

This concludes my prepared statement and I would be delighted

to answer questions at the appropriate time.

[The prepared statement of Dr. Vitko follows:]

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Mr. MARCHANT. Thank you, Dr. Vitko.

I would like to acknowledge that we have been joined at this

time by Representative Turner from Ohio, Representative Higgins

from New York, and Mr. Van Hollen from Maryland.

At this time, I will recognize Dr. Saldarini.

STATEMENT DR. RONALD J. SALDARINI

Dr. SALDARINI. Good afternoon.

My name is Ronald Saldarini. I am currently a scientific and

business consultant to the vaccine and pharmaceutical industry.

From 1986 to 1999, I was president of the global vaccine business

of American Cyanamid and American Home Products. I am here

today as a member of the Committee on Accelerating the Research,

Development and Acquisition of Medical Countermeasures Against

Biological Warfare Agents which was convened by the Institute of

Medicine and the National Research Council. In my remarks this

afternoon, I would like to draw attention to the committee’s central

findings and recommendations.

First, let me note that the committee was convened in response

to a congressional mandate and was charged with examining the

DOD acquisition process for medical countermeasures to protect

against biological warfare agents. We were asked to identify factors

that were impeding the DOD acquisition process and to recommend

strategies for accelerating the process. Our review was conducted

throughout 2003.

The scope of the committee’s assessment covered early research

and development through Food and Drug Administration approval.

We did not examine production and procurement activities, the extent or nature of any biological warfare threat or to assess the

value to DOD of developing medical countermeasures compared

with pursuing other obligations. We worked from the premise that

biological weapons pose a threat to the health of military personnel

and that additional FDA approved countermeasures are needed.

Under the best of circumstances, developing new vaccines and

drugs is technically and financially challenging. Furthermore, developing biodefense products poses additional scientific, regulatory

and ethical challenges because it is not always possible to test efficiency in humans. In our review of DOD’s work on medical countermeasures, we have found fragmentation of responsibility and authority, changing strategies that had resulted in lost time and expertise, and a lack of financial commitment adequate to meet the

requirements of the program’s goals.

The work was part of a program covering both medical and nonmedical countermeasures against both chemical and biological warfare threats. Responsibility for centralized oversight of the program, for program planning and budgeting and for operational

tasks was distributed across several different chains of command.

We viewed the state of the program as an indication that DOD

leaders lacked an adequate grasp of the commitment, time, scientific expertise, organizational structure and financial resources

required for success in developing vaccines and drugs. We also saw

it as an indication that DOD had not given the task sufficient priority to produce the desired result.

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In response, we recommended action in several areas. We first

recommended making the DOD program a truly high priority

which would include organizational, scientifically knowledgeable

leadership, scientific infrastructure improvement and necessary

funding to achieve program goals. We recommended accomplishing

these changes through the creation in DOD of the Medical Biodefense Agency which would be a new agency with comprehensive

responsibility for the research and development program for medical countermeasures against biological warfare agents.

We proposed that this agency consolidate the functions and resources of several existing activities to overcome the competing

lines of authority and multiple reporting relationships that the

committee had found. In the committee’s view, it was essential that

the head of this agency have direct authority over budgeting and

over the full range of agencies management and operational activities including managing candidate products from the science and

technology stage into and through the DOD acquisition system.

The committee also recommended giving the Medical Biodefense

Agency responsibility for developing medical countermeasures

against infectious diseases. We emphasized the agency should have

a highly qualified director with strong experience in vaccine and

drug research, development and manufacturing. In addition to

strengthening the intramural research and development program,

the committee encouraged building a strong extramural program to

bring the expertise and creativity of industry and the academic

community to the task.

External oversight and accountability for performance were also

seen as necessary. The committee recommended an annual, independent, external review by a standing group of experts from academia and the biotechnology and pharmaceutical industries. If

DOD were not taking the steps necessary to establish an effective

program and make appropriate progress, some or all of the responsibility should as a last resort be transferred from DOD to another

appropriate Federal agency.

Finally, the committee also pointed out the need for DOD to

work with other Federal agencies and the broader scientific community to address other challenges which would include establishing effective collaborations with academia and industry and reducing administrative and legal barriers to such collaborations, meeting the special regulatory challenges in testing biodefense projects,

overcoming current and potential bottlenecks from insufficient access to essential research resources, including specialized laboratory facilities, laboratory animals and ensuring the availability of

a well trained work force.

For many years, DOD researchers were among the very few pursuing the development of medical countermeasures against biowarfare agents. Despite the recent upsurge in interest, effort and funding aimed at protecting the civilian population against bioterrorism, the committee saw a need for a continuing and effective DOD

program to ensure that unique military needs for battlefield protection receives sufficient attention.

Thanks for the opportunity to testify and I am pleased to answer

any questions you have.

[The prepared statement of Dr. Saldarini follows:]

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Mr. MARCHANT. Thank you, Doctor.

Mr. Platts is with us at this point and we will now begin questions. Mr. Turner and Mr. Platts, do you seek recognition for questions? The Chair recognizes Mr. Turner.

Mr. TURNER. Thank you, Mr. Chairman.

I want to thank Chairman Shays for holding this hearing and

continuing his efforts in ensuring that our country is prepared in

the area of the terrorist threats that we are facing both in the area

of first responders and in the areas of our Federal agencies that

have responsibilities for coordinating their efforts as we plan and

also restructure our assets to address these threats.

Dr. Klein, in looking at your testimony and in light of the chairman’s efforts for us to get an understanding of past and current approaches, how we are being flexible in transforming to meet the

risk, at the top of page 3 I see your comparison of the past and current approaches and I get a little confused. The first sentence says,

‘‘The current CBRN defense strategy, the current strategy, emphasizes a capabilities-based approach rather than the previous approach which provided greater emphasis on prioritizing threat

agents and targeting budgetary resources based on validated intelligence.’’ When you talk about the previous approach, you say the

previous approach had a greater emphasis on prioritizing threat

agents and targeting budgetary resources based on validated intelligence. If we are going away from that, it sounds to me like we

are preparing for things that we know aren’t likely to happen and

diluting resources from things we know may happen but I am certain that is not what you mean.

Going to the next one, it says ‘‘Capabilities-based planning focuses more on how adversaries may challenge us than on whom

these adversaries might be.’’ You go on to emphasize the reduction

of the dependence on intelligence data. Could you give us your

thoughts separate from the testimony that is written here on what

that contrast means?

Dr. KLEIN. That is certainly a very good question. If you look at

the way the Department of Defense is trying to transform, we are

trying to go through a capabilities based approach as opposed to

the specific threats. If you look at what we had done in the past,

we looked at specific things like anthrax, botulism, what is happening in today’s environment is we are now seeing a lot of engineered

threats, genetic activities and things which we cannot pursue, for

example, vaccines against everything the terrorists might throw at

us.

What we are trying to look at is a more broadbased generic approach so rather than saying, for example, that country x is developing a specific toxin be it chemical or biological, we are trying to

have a more broadbased approach so that we are not having to rely

specifically on intelligence. Hopefully we will be able to respond in

a more quick and broad way. Certainly the issues facing our Nation, where civilians are being targeted as well, with our advances

in genetic engineering, it is very difficult for us to come up with

specific antidotes, pills, vaccines for everything the terrorists might

throw at us. So therefore, we are going to a more broadbased approach.

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We still need actionable intelligence on how to perform but we

are trying to do more on capabilities rather than a specific threat.

Mr. MARCHANT. Mr. Platts, do you seek recognition?

Mr. PLATTS. I apologize for my late arrival and do appreciate the

written testimonies. There are a couple questions I would like to

address.

Dr. Klein, I think in your testimony you talked about the Joint

Vaccine Acquisition Program. I am just trying to get an understanding of the $322 million committed in 1997 and where we are

today. Am I understanding correctly that we are talking about fiscal years 2012, 2020 is when we expect to see results from this investment we are making?

Dr. KLEIN. We hope we will see investments earlier. As you probably realize, getting a vaccine licensed is challenging at best. It

takes a long time. Certainly HHS and DHS as well as Dr. Fauci

have realized we have these challenges.

We are doing now with the animal efficacy rule will let us speed

up processes. DOD only uses licensed vaccines, so we have a requirement to go through a long and cumbersome process, but we

certainly hope we will have these vaccines available prior to 2020.

What I think is really changing our ability to license vaccines will

be the animal rule and our understanding of genetic characteristics

such as a better understanding of the DNA.

Mr. PLATTS. From a funding standpoint, what are the current projections on the cost, the $322 million we have already invested?

Dr. KLEIN. That is correct. During the building of our 5 year budget from 2006 to 2011, we added an additional $2 billion for our

chemical-biological defense program. Probably $80 million of that

will be directed toward vaccine development so that we can protect

our men and women in uniform. Our mission is somewhat easier

than the civilian side where they have a very large age group to

be under consideration from infants to the elderly. In our case, we

have men and women of very healthy, predictable ages. So we are

optimistic that some of our applications will come out earlier than

those that will be more broadbased for the entire population but we

are investing a considerable amount of money for vaccine development.

Mr. PLATTS. The $322 million investment is not a lost investment, that is laying a foundation?

Dr. KLEIN. Yes, it is laying a foundation. It is absolutely not a

lost investment. We had clinical trials, we had product development. So it was not money wasted by any means.

Mr. PLATTS. I chair the Subcommittee on Financial Accountability so I am always looking at what we are investing, how we are

investing and bottom line, what return are the taxpayers getting,

so I understand this is a very complex process and it is multiyear,

but I want to make sure that we are moving in the right direction.

Dr. Fauci, on the actual investments or the research being done,

how are we not competing with the private sector for the free market reasons for pursuing these projects with tax dollars? How are

we guarding against that?

Dr. FAUCI. Actually, we don’t want to compete, we want to totally

synergize with them. We cannot make countermeasures ourselves.

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search and the clinical and applied research and partner with either biotech or pharmaceutical companies to ultimately develop a

countermeasure.

In fact, that is the whole purpose of the BioShield Project where

the HHS in the form of NIH predominantly does the research that

does the concept development, does the early Phase I, II and sometimes into more advanced development and then the companies

partner with us to actually manufacture it and make the commitment which under the circumstances that we have now are being

aided by the set aside money, the $5.6 billion in BioShield, to be

able to then make a procurement of that. It really is a partnership.

It is not at all a competition.

Mr. PLATTS. Thank you.

Mr. MARCHANT. Dr. Klein, in your testimony, you talk about the

DOD Clinical and Biological Defense Program activities and state

they are informally coordinated with the Department of Health and

Human Services. Can you talk to us about the informal agreement

and how it works?

Dr. KLEIN. One of the things we do is we have a lot of interaction

at the working level where the staff of the Department of Defense

meets with Stewart Simonson’s staff. We have a lot of technical exchanges, a lot of regular meetings scheduled and in addition, Mr.

Simonson and I meet periodically to prioritize to make sure we are

spending the taxpayers’ dollars in the most effective way, that we

are not duplicating.

The current agreement we are trying to work between the two

departments is where DOD’s role and responsibility will be clearly

defined on some of the screening and up to Phase 1, then we will

transfer that work through the Department of HHS where they can

take it through more of the clinical trials where they have greater

expertise than DOD. So we are trying to utilize the expertise of

both departments to the benefit of the taxpayer.

Mr. MARCHANT. What steps has DOD taken to respond to the Institute of Medicine?

Dr. KLEIN. We have taken several steps. I was confirmed in 2001

about the time a lot of activities were increasing, obviously the terrorist attack and subsequently the anthrax attacks. We have reorganized the Chemical and Biological Defense Program to have a

Joint Requirements Office through the joint staff where they define

our requirements; we have organized our science and technology

development through the Defense Threat Reduction Agency; we

have increased the technical competency of our staff where we have

several professional medical staffs onboard; the Deputy for the

Chemical and Biological Defense Program is a medical doctor, a

former Assistant Surgeon General of the Air Force. We have taken

a lot of the recommendations of the Institute of Medicine.

Since then BioShield has been created in addition to the Department of Homeland Security. So there is a lot of activities created

since the Institute of Medicine study.

Mr. MARCHANT. Can you explain why the JVAP program should

continue to receive funding in its present form?

Dr. KLEIN. The JVAP Program is one which like all programs,

it has successes, it has things we would like to occur at a more

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ment as well as a lot of the science and technological development.

Again we are focusing a lot of attention on that program. The Army

is the executive agent for this activity. We have a joint program activity through the Army to coordinate those activities. So we are

focusing our attention to hopefully increase the end result and that

is to protect our men and women in uniform.

Mr. MARCHANT. Secretary Simonson, you say in your testimony

that HHS has defined a three stage development and acquisition

strategy with open competition awards at each stage. How are you

reaching out to companies who have developed or are in the process of developing countermeasures?

Mr. SIMONSON. That is an important part of the operation of BioShield and our success I think will be contingent upon how well we

are out there probing the market to bring firms in to propose on

our various projects. One we do it is with request for information

where we will actually send out a circular seeking sources to find

out what is out there, what companies are making product or investing in products that might be useful to us. It is a way of doing

market research and also assessing the state of science.

We are also working very aggressively through the WMD Subcommittee to understand what is going on in other agencies. Dr.

Klein mentioned the informal work that he and I are doing to bring

our two agencies together. There is also a more formal process, this

Weapons of Mass Destruction Subcommittee where you have all of

the stakeholders in the Federal research community. That is a

place where we can exchange information on who is funding what

and try to elicit support for or interest in the projects we are trying

to develop.

I think those are two ways that we do it. We are also still learning. There are other ways of reaching out to industry, especially

the smaller, biotech companies to keep them interested in BioShield.

Mr. MARCHANT. Do you feel there is sufficient interest out in the

biotech industry to try to address these issues? Do you think there

is sufficient interest in that industry to stimulate the kind of research we probably need?

Mr. SIMONSON. I think there is sufficient interest. I think the interest is more in the smaller biotech firms than it is in big pharma

simply because of the tradeoffs that have to be made. Dr. Fauci

talks about the relative tradeoff of cholesterol lowering agent as opposed to a biomedical countermeasure. There is no comparison. The

whole vaccine market worldwide is less than one cholesterol lowering agent, so it is not as appealing to the big manufacturers so I

think our future is with the small to medium sized biotech firms.

There is a lot of work to bring this along but once you do, you

are building an infrastructure, building something within the

United States that can be useful to us in other ways. It is a very

labor intensive and collaborative process between us and these

biotechs. The ultimate result is one that makes the industrial base

better in the United States, we think. We saw this with the company that produced the second generation smallpox vaccine.

Mr. MARCHANT. Dr. Saldarini, your committee concluded biodefense efforts of DOD were poorly organized to develop and license

vaccines, therapeutic drugs, and antitoxins to protect members of

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the armed forces against biological warfare agents. What can we

expect from the JVAP Program it continues in its current form

without implementing your committee’s recommendations?

Dr. SALDARINI. First, while JVAP was the topic of conversation

during the committee’s deliberation, and while it was clear there

were some issues with JVAP in terms of their activities for acquisition, it was the committee’s conclusion that JVAP was not the sole

source of the problem, in fact was a part of a larger problem where

it was unclear who was in charge of the program and assessing priorities and how the entire thing was organized to get something

done.

If you look at the charts that we looked at as we tried to evaluate

the different groups involved, it became very, very difficult to understand the distinction between each of these groups. It was an

alphabet soup of acronyms for an outsider who doesn’t live in the

military or the DOD on a daily basis. It was very difficult to assess

who was in charge of what and how things actually got done and

how priorities were moved through the systems.

So where JVAP did have some problems, JVAP was not the sole

source of the problem. From our perspective, it was the overall organization with an inadequate priority infrastructure funding resource base that created the problem.

This committee finished its activities in 2003, so it has been 18

months since we last, or certainly I looked at it and I don’t believe

any other of the former committee members have looked at it, so

I don’t know really what has transpired. There were changes. Apparently Dr. Klein mentioned something about changes with JVAP

but I don’t know what they are and I don’t think any of our committee members do.

We reported what we found at the time. Perhaps things have

been streamlined but it is still unclear to me whether or not there

is adequate authority available to make things happen in a committee fashion.

Mr. MARCHANT. Thank you.

The committee counsel would like to ask some questions.

Mr. HALLORAN. First, Dr. Fauci, NIAID awarded a grant to the

Dynport Vaccine Co. which is the prime integrator or contractor for

the Joint Vaccine Acquisition Program. Could you tell us something

about that grant and why it looked on the face to be a duplication

of paying for an activity that JVAP is already being paid for.

Dr. FAUCI. It may appear that way but it actually is complementary. The grant that we are talking about was actually three grants

and a contract to Dynport and the total was I think about $29 million. Two grants were to support development of a vaccine candidate for botulism toxin that complemented the activity that was

going on in the Department of Defense.

In addition, there was a grant for Phase II trial of the Venezuelan Equine Encephalitis. Again, although the DOD was also

working on that, it was complementary and one was to support research on a vaccine candidate for tularemia which the DOD had responsibility for before but then handed that over to us and we are

now working fundamentally on the tularemia.

So if you look at the organisms and match them, you say, wait

a minute, the DOD is really doing that but actually in one of them,

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they are no longer doing the tularemia and the other two are complementary working on aspects of it that the DOD is not.

Mr. HALLORAN. Complementary in the sense of adding the population to the testing profile that Dr. Klein mentioned that the DOD

doesn’t have to cover?

Dr. FAUCI. There are two things, different scientific aspects but

importantly geared toward and Dr. Klein mentioned this in his oral

testimony, that they are fundamentally looking at forced protection

and the warfighting individuals where we are looking at everything

from children up through and including the elderly. It is much

more for the civilian population, so a lot of the complementariness

is due to the broader scope of people that we are responsible for

in the civilian population.

Dr. KLEIN. I think this is an example of the two departments

working together very well where we complement to the benefit of

the taxpayer rather than duplicate. When you look at just the

headlines and don’t dig into the technical aspects of it, one can see

on paper it might have been duplication until you really look at the

details.

Mr. HALLORAN. Why did DOD hand over the tularemia work? Is

that not a force protection threat?

Dr. KLEIN. We felt that NIAID had better technical expertise

than the Department of Defense. We took it up to a certain point

and felt their technical expertise was better than ours.

Mr. HALLORAN. Let us talk about botulism, where we are. The

next panel has some testimony about some kind of halting and

stumbling attempts to get botulism antitoxin, particularly outside

the A and B serotypes. Where are we in that, both in terms of what

we have in hand should an attack take place in the United States

now or in the military theater and what is coming down the pipeline and when?

Dr. FAUCI. Botulism is a complex issue and is somewhat problematic for a number of reasons that I will briefly describe. There

are seven, it is a heptavalent toxin and we are in the process now

of making monoclonal antibodies which are antibodies against a

particular component of a botulism toxin. The most common that

are used are A, B and E but you really have to have sort of a cocktail of all of them.

The difficulty that we face with transitioning from the horse sera

botulism antitoxin which has been the standard that has been used

both in the unusual occurrence of situations of natural infection

with botulism in this country as well as what the DOD has been

working on for years as a countermeasure for force protection. The

transition from the polyclonal sera and plasma from the horses is

taking a lot of time for the simple reason that relates to one of the

things we have been saying in one way or another among all of us,

the difficulty in engaging researchers and industry on the outside

to get involved.

We have one very good researcher that is superb at developing

the initial monoclonal antibodies against the individual subtypes of

botulism. The difficulty is that this is one group working alone so

it takes about 6 months per subtype and then you hand it over to

the more industrial related ones that go on do the actual manufacture and the clinical trial.

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So if you stagger them at 6 month periods, by the time we get

a robust heptavalent polyclonal cocktail, it is going to take several

years. It would be wonderful if we had 20 or 30 investigators on

it but there just is not the interest that we would like to see for

the reasons that people want to work on other things. That gets

back to the principle of trying to incentivize not only individual investigators but also companies to get involved.

Right now in an emergency we would have to rely on the

polyclonal serum that we have had and are making more of but

hopefully we will transition over to the monoclonal antibodies.

Dr. KLEIN. One of the areas and what I am hoping is as we get

a better understanding of our DNA structure, that the kinds of research activities that individuals are currently performing will be

enhanced by genetic splicing, DNA splicing and things of that nature. So we are hopeful that we will be able to get products out

quicker with our understanding of the basic fundamental responses

under our DNA.

Dr. SALDARINI. I can talk about the current generation botulinum

program. HHS picked up after September 11th a DOD program

that began during the first Gulf war to hyperbenize horses against

all seven serotypes and then to ferrice them and collect this

hyperimmune plasma but it was never finished. They just had fairly substantial amount of hyperimmune plasma in storage. It was

transferred to us I think at the end of 2002.

HHS undertook to have that material processed. This was a process that hasn’t been done in an awful long time, so the firm we engaged to do it had to spend a lot of time moving deliberately because of the risk of losing material if they made a mistake. In any

event, that work is done. They finished processing the plasma. We

had sort of mixed results on the yield because of the age of the

plasma and so forth. I would be happy to come to your office give

you more detail on exactly how much we have. We don’t talk about

it openly.

We also have a program now where a whole new population of

horses is being hyperimmunized against all seven serotypes. This

is an example of where things can’t be rushed beyond what science

will allow. The horses have been immunized and then challenged

with botulinum but it takes a period of time to get the titer up so

you can actually begin to ferrice them.

We expect some time in the fall that we will have enough

hyperimmune plasma that we can begin processing the new material. We have an objective, an ultimate objective of 100,000 treatment courses of heptavalent antitoxin but it is a big operation, 200

horses over a few farms and it is also I have learned as much an

art as it is a science.

The current botulinum toxoid or vaccine is no longer licensed, it

is in IND status and there is a cohort within the research community and at the Defense Department that has a need for botulinum

vaccine and so we are looking at what options are available there.

Dr. VITKO. It is an interesting term because I use capabilities

with a slightly different meaning. Right now I believe that it still

makes a lot of sense to look agent by agent in terms of the extent

of the threat that they pose. So we look at the feasibility of a terrorist organization engineering that threat, producing that agent,

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disseminating it and look at the consequences associated with it

and we do make use of intelligence information both on interest by

known organizations, skills levels associated with those organizations to give some assessment of what could be done, but then we

really do take a look at the scientific basis for producing that agent

and disseminating it, irrespective of the threat group. We believe

at this stage that is the best way of assessing what constitutes a

material threat to this country. Material threat determination says

if an organization can produce it, is it one. As you heard, we postulated and formulated working with HHS in an interagency forum

a timeline for when we think certain engineered threats could come

on and the general characteristics of those. We have developed a

strategy for dealing with that as well as a hedge strategy in case

our projections are off.

I think in that sense it will be a while until we get to the goal

where we can treat broad classes of agents as a class and until we

have, as desirable as it is, sort of broadbased either vaccines or

antibiotics for dealing with those. That doesn’t take away from that

being a desirable R&D goal but for near term strategy, I think it

does have to focus on which agents pose the greatest risk in the

current scenarios.

Mr. HALLORAN. Thank you.

Mr. MARCHANT. The Chair acknowledges that Mr. Duncan from

Tennessee has joined us. Mr. Duncan, do you have any questions?

Mr. DUNCAN. Thank you and since I just got here, I won’t ask

any questions but I will say this. I am disturbed about this statement or Chairman Shays’ that says ‘‘A 2004 study by the Institute

of Medicine found that the Department of Defense Biodefense Program fragmented and often prey to competing priorities. Launched

in 1997 with $322 million, the JVAP has spent that much and

more. Yet lists of JVAP accomplishments provided to the subcommittee included just one recently licensed therapeutic, no completed vaccines and two target vaccine programs terminated after

significant expenditures.’’

I notice there is testimony from one of the witnesses on the next

panel that says ‘‘This procurement process which formally began on

April 1, 2004 and has yet to be completed 14 months later is simply

too long and too burdensome to sustain continued interest in participating in BioShield by companies such as Human Genome

Sciences whose principal focus is not the Federal sector.’’

I serve on three different committees and several different subcommittees and I read articles and columns all the time about

what all these other committees and subcommittees do. It seems

that every day we see examples of unbelievable waste and inefficiency here at the Federal level. It seems if we want something to

cost 10 or 15 times more than it should and 10 or 15 times more

than it would with fewer results than if the private sector did it

or if State and local governments did it, just turn it over to the

Federal Government. It gets pretty tiresome to hear this out of

every department and agency.

Everybody today, because we have a patriotic fervor going on

wants to give the Department of Defense everything they ask for

and more but the waste and inefficiency, we had a hearing in this

committee last week which said the Department of Defense has

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blown $466 million in its ordinary procurement processes. We just

gloss over things like that because I guess figures in the billions

and $466 million are too big to comprehend but it gets pretty sad

after a while.

Thank you, Mr. Chairman.

Mr. MARCHANT. Thank you, Mr. Duncan.

I thank the panel today for its participation and we will recognize the next panel. Our next panel will be: Dr. Michael G. Hanna,

Jr., Chief Scientific Officer, Intracel and Dr. James H. Davis, executive vice president and general counsel, Human Genome Sciences,

Inc.

[Witnesses sworn.]

Mr. MARCHANT. At this time, the Chair will recognize Dr. Hanna

for his testimony.

STATEMENTS OF DR. MICHAEL G. HANNA, JR., CHIEF SCIENTIFIC OFFICER, INTRACEL; AND DR. JAMES H. DAVIS, EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, HUMAN

GENOME SCIENCES, INC.

STATEMENT OF DR. MICHAEL G. HANNA, JR.

Dr. HANNA. First of all, let me say how grateful I am for having

the opportunity to address this congressional committee. As you, I

am also concerned that such a committee meeting on the Elusive

Antidotes of CBRN Countermeasures must be held in June 2005.

I would like to tell you about a successful development of a

unique therapy for botulinum toxin exposure. This story consists of

scientific success and extreme frustration. There are seven

serotypes of botulinum toxin. They have been identified as the most

dangerous biological substances and the most likely biological

weapons of mass destruction.

The success is that my company, Intracel, through a Department

of Defense contract, referred to earlier by one of you, between 1991

and 1996 was successfully able to develop a heptavalent equine

antibody product that was efficacious in combating the seven

serotypes of botulinum toxin, was safe in humans and was FDAapproved for emergency use. We made 5,000 therapeutic doses before the project was terminated by the Joint Program Office of the

Department of Defense in 1996. It was terminated at this point because we had proof of principle and a botulinum crisis was improbable. Since September 11th, however, the improbable became probable.

Today, Federal officials fear the world is vulnerable to such an

attack and we are ill prepared if one were to occur. In fact, Tommy

Thompson in his exit speech to HHS declared that he was surprised that such an attack had not already occurred, which also

surprised me that he would say that. Dr. Anthony Fauci of NIAID

was quoted that this is one of the Federal Government’s top bioterrorism interests and ‘‘we are marshaling all available resources.’’

This statement was made in 2002; yet as far as I know, as of last

year, we still had only the residual several thousand therapeutic

doses left over from Intracel’s previous effort. Today there was

some discussion where they were not prepared to discuss what they

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have today generated from the new contract and I can tell you they

have monoclonal product only not heptavalent product.

I was at a meeting with the Department of Defense, the Army,

when one of them mentioned that they had monoclonals to A and

B and Congressman Dr. Roscoe Bartlett said, let us not let the terrorists know that because then all they have to worry about is C

through G.

This is my frustration. With our scientific success of overcoming

the hurdles to produce such an important therapeutic product, we

have not been successful in fulfilling our destiny of producing the

hundreds of thousands of doses necessary to protect our military

and civilian populations at risk. In Los Angeles, they had a simulated botulism attack which was very successfully carried out. They

calculated they would have needed 600,000 doses to protect the

population at risk. This was months ago. We are no where close to

having that number of therapeutic doses.

The NIH used considerable resources to fund grants to make recombinant vaccines for protection of botulinum infection and to develop drugs which would interfere with the enzymatic activity of

the organism. These efforts however worthwhile are problematic 10

year endeavors.

Today, Intracel holds the intellectual property, over 300 standard

operating procedures and all the necessary equipment to produce

the proven heptavalent equine therapeutic product and was willing

and capable of generating through private funds to develop a subsidiary that would build a validated manufacturing facility and

produce 50,000 therapeutic doses in 2 years. The yield would be

more than 100,000 doses per year thereafter. We made this proposal in 2002.

In addition, using our own moneys, Intracel offered to complete

the research program and begin the next generation product using

safer and more effective human monoclonal antibodies. We happen

to be the only company that has ever made a licensed human

monoclonal antibody. This second generation product could be prophylactically used and be safe for multiple injections for better protection of the troops after an exposure.

Clearly, we thought we were the poster child of BioShield. However, in spite of who we contacted and how hard we tried, we could

not get the Government to give us a written commitment to purchase the product based on our success in meeting the specifications that we had established for the DOD in 1997. We talked to

everybody and anybody and we had Congressman Shays and Congressman Bartlett with us at many of the meetings.

It seems that the Government agencies are not really marshaling

efforts to deal with this problem. The agencies have relegated down

to the ranks of the functionaries and contract and grants sections

and if they have the urgency that this issue requires, it has not

overcome the status quo.

I would like to know what we would have done last year, this

year or next year if such a botulinum toxic weapon was used in the

United States in the real sense, not in a simulated sense as we did

in Los Angeles a few months ago. Clearly the BioShield concept

with all of its good intentions has not gained the strength to overcome the status quo.

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I would like to repeat, Intracel was not asking the Government

to pay for the production of this important component of our medical armament for biodefense. Intracel was asking the Government

to give us a commitment to buy the product if we met specifications

already paid for by the Department of Defense. That probably was

our mistake in not asking for money.

To rapidly generate required antidotes and therapies for weapons

of mass destruction requires a paradigm of built-in redundancies

such as those employed in successful NASA goals and accomplishments after the Presidential mandate by President Kennedy. I

would have thought that BioShield provided the capability to build

in redundancies but it appears to me from people I have talked to,

BioShield does not impart this kind of legislation.

Thus, I recommend to this subcommittee that the BioShield legislation should be rewritten so that it funds multiple groups and

creates competition of several companies up to Phase 1 trials, then

let the survivor of the most competent prevail. With that type of

competitions, you would have redundancies to better guarantee

success and you can end up with the stockpiles that will save lives

if such an emergency occurs. No longer should we rely on these

products being generated by the low bidders as an independent

agent for any agency.

Second, I think what we saw this morning is that the stovepipe

type of funding coming down through the agencies does not really

bode well for interagency interactions which we are going to need

both at the development level, the manufacturing level and mostly

at the level of preparedness and defense out in the field, the States

and the counties and the cities if such an attack ever occurs.

Thank you.

[The prepared statement of Dr. Hanna follows:]

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Mr. MARCHANT. Thank you, Dr. Hanna.

Dr. Davis.

STATEMENT OF JAMES H. DAVIS

Dr. DAVIS. Mr. Chairman, members of the subcommittee, thank

you for the invitation to appear before you today on behalf of

Human Genome Sciences.

I am Jim Davis, executive vice president and general counsel of

HGS. In this capacity I have been extensively involved with the

business development, regulatory approval process and Federal

procurement issues related to the anticipated sale of our innovative, therapeutic treatment Abthrax for victims of anthrax exposure. We undertook this project on our own initiative and at our

own expense.

HGS is a biopharmaceutical company located in nearby Rockville, MD that discovers, develops and manufactures innovative

drugs to treat and cure disease. Currently, we have seven drugs including Abthrax in clinical development, including six monoclonal

antibodies.

The primary focus of our company, however, is not the development of drugs to protect against attack by biological and chemical

weapons. The principal focus of our company has been and will

continue to be pursuit of innovative biopharmaceutical products for

the commercial market. Nevertheless, just over 3 years ago we realized that our company had significant technology and capability

to develop an effective, near term countermeasure against one of

the Nation’s most immediate and serious bioterrorism threats.

Located just outside Washington, DC, we witnessed firsthand the

potentially devastating effects of the use of anthrax as a terrorist

weapon in late 2001. Using our own funds, we developed a fully

human monoclonal antibody drug called Abthrax that can prevent

and treat the lethal effects of anthrax infection. The drug can be

given prior to or after exposure, can be used alone or in conjunction

with the current vaccine and antibiotics.

We have shown in animals that it is effective against high doses

of anthrax, we have demonstrated initial safety in humans and we

have been ready to manufacture this product and complete the

final human safety trials for over a year and a half, but to move

forward we need to bring to conclusion the lengthy procurement

process now underway with the Federal Government.

If a contract is signed with the Federal Government and a final

commitment to acquire a fixed number of doses and the number of

doses requested is of sufficient commercial quantity to make it

worthwhile, this countermeasure could be available for emergency

use as early as next year. While this is an exciting prospect for our

company and of valuable benefit to the Nation, our frustration remains the Federal Government could have had this product in the

stockpile already if the full authority of Project BioShield had been

used as intended.

The primary challenge of biopharmaceutical companies such as

HGS in this field is the absence of a commercial market for bioterrorism countermeasures. The only valuable market is the Federal Government and perhaps our foreign allies. Without a clear

and easily accessible market, the drug will not be developed.

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In its initial BioShield solicitation for anthrax therapies, HHS

has not even specified the precise amount of quantity they wish to

purchase. Rather, the solicitation requires bidders to pose pricing

for a broad range of quantities ranging from 10,000 doses to

200,000 doses. It now appears that even if this contract is awarded

and HHS decides to exercise its option for the manufacture, HHS

is unlikely to purchase a full 200,000 doses as originally proposed.

This is particularly frustrating since the manufacture of these

compounds requires significant manufacturing capability and significant manufacturing startup costs. In short, the cost per dose of

200,000 doses is significantly less than the cost of 100,000 doses

and astronomically less than the amount for 10,000 doses.

Setting a firm commitment for the quantity to be purchased and

making sure those quantities are large enough to be commercially

viable is critical to advance BioShield’s purpose of promoting the

development of a biodefense industry.

My written testimony raises additional concerns. There are several steps HHS could undertake to increase industry participation.

In the interest of time, I will not enumerate them here. Let me say,

however, that timing is critical. I applaud the subcommittee for its

continued oversight of this critical biodefense program. Near term

delays in evaluating and considering the production of viable countermeasures can disproportionately prolong the procurement of

such drugs. To date, abthrax has been developed entirely with private funds but to move forward, we need a firm commitment from

the Government to purchase this product. With sufficient Government support, HGS could begin producing significant quantities of

Abthrax by the end of next year.

We look forward to formalizing this commitment in a contract

with HHS in the coming weeks and we would appreciate every effort to ensure that maximum quantities are purchased for the

stockpile as soon as possible without any further delay.

Thank you for this opportunity to testify and I look forward to

answering your questions.

[The prepared statement of Dr. Davis follows:]

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Mr. MARCHANT. Thank you, Dr. Davis.

The Chair recognizes Chairman Shays.

Mr. SHAYS. Gentlemen, thank you for being here today. I feel

badly that I could not ask some questions of the previous panel because I wanted to get into the stovepiping and so on. I wanted to

get into why DOD has one program and others have another and

I wanted to get into the connection between them.

What did you hear from the previous panel that you agreed with

the most and that you would disagree with the most? I would ask

that of each of you. Dr. Hanna.

Dr. HANNA. I agreed with the statement made by HHS representatives that working with large pharmaceutical companies is

not really going to work. They really could make much more money

with a cardiovascular drug than they can with these types of vaccines. There are many vaccines that were made that were never

used because they couldn’t make any money selling them. The

countries that were going to use them couldn’t afford to pay for

them.

Working with the smaller, mid-size, biotechnology companies is

probably clearly the way to go. Unfortunately, even those companies are not going to do some of this work on contracts or grants

because they can’t make a living at a 6 percent margin on the work

they do but this is the way the legislation is written to allow them

to fund their programs.

I think the legislation needs to be changed to allow for multiple

awards, grants or contracts or allow companies to come in and do

it on their own but still let them compete. This is the way good

science gets done in the major projects this country has launched.

Mr. SHAYS. What statement did you disagree with the most by

any of the previous panelists?

Dr. HANNA. I disagreed with the fact that the vaccines in the

JVAP Program and in some of the other programs are difficult to

accomplish. We could have had an anthrax vaccine a couple of

years ago, we could have had a couple hundred thousand botulinum antitoxin, polyclonal equine botulinum antitoxin in our repertoire. The urgency is there at the top level at the present and it

is at the congressional level and the Senate level and at the top

offices of these departments but when it filters down to the functionaries, the urgency is lost and the status quo steps in and this

is demotivating to the small, medium or large pharmaceutical companies.

Mr. SHAYS. Explain to me why we don’t have progress in those

two areas? Tell me specifically why. You are saying it is motivate

up here but what specifically wasn’t done that should have been

done?

Dr. HANNA. It is my understanding that the legislation doesn’t

allow them to think outside the envelope, that they have to function according to the legislation and the legislation allows them to

award a contract to the lowest bidder and that contract is what

they live with. If they would allow them to award several contracts

simultaneously for the same project and let them compete to Phase

1 trials and the one that gets to the Phase 1 trials and can work

with the FDA the fastest ends up with the purchase order is the

way to go.

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Mr. SHAYS. You are saying that you would cover the research

costs for the three or four that would get involved?

Dr. HANNA. We offered to do it through private investment. We

had investors.

Mr. SHAYS. You were willing to compete privately in a contest because you believe you would have had a better product in the end?

Dr. HANNA. We have already made it, we had already made it. We spent $25 million of DOD’s money to make the first 5,000.

Mr. SHAYS. I know that and that is why I am asking you why

we don’t have it? What in the law prevented them from moving forward with you?

Dr. HANNA. I don’t know. I spoke to somebody recently who is

well known in this area and he said the law just prohibits a multiple contract or multiple awards for the same project.

Mr. SHAYS. Why would they have had to do multiple awards? If

you already had it, why couldn’t they just contract to you?

Dr. HANNA. They did. They contracted a foreign company. HHS

contracted a foreign company to make it.

Mr. SHAYS. Because you were a higher bidder? You weren’t the

lower bidder?

Dr. HANNA. We didn’t bid at all.

Mr. SHAYS. Why?

Dr. HANNA. We were offering to do it at our own costs.

Mr. SHAYS. You are confusing me. This has not been a great day,

so maybe it is my problem but be patient with me here. You had

a product that DOD helped you develop?

Dr. HANNA. They contracted with us to develop, yes.

Mr. SHAYS. They gave you money to develop the product. You developed the product. Are they saying the product won’t do the job?

Dr. HANNA. No.

Mr. SHAYS. Are they saying the product costs too much money?

Dr. HANNA. No. The project ended in 1997 and there was no urgency and need for it.

Mr. SHAYS. But the project ended then but you still had the capability to produce the product?

Dr. HANNA. We have had the capability from 1997 to now.

Mr. SHAYS. So why do you want me to be so confused here?

Dr. HANNA. I am not trying to.

Mr. SHAYS. There has to be a reason.

Dr. HANNA. I don’t have an answer. I can think of no reason. I

thought there had to be a reason also.

Mr. SHAYS. This is a conversation we had somewhat privately

and I thought you would be able to publicly put on the record.

Dr. HANNA. I did at the suggestion of NIAID, Tony Fauci’s group,

I did put in at their request an unsolicited proposal to the CDC to

make this product and it was rejected.

Mr. SHAYS. Did they give you a reason why?

Dr. HANNA. No, but they turned around and awarded the contract to this foreign company which we heard today was having extreme difficulties getting geared up to make the product.

Mr. SHAYS. Dr. Davis, can you enlighten me about this issue?

Dr. DAVIS. I am not sure I can enlighten you about his issue, no.

We have been facing a slightly different issue in that the Government clearly appears to have some interest in our product, it has

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been a long procurement process and as a consequence, our concern

is that the delay makes it very difficult for us to plan and makes

it very difficult for us and other companies to be willing to develop

from their own funds products. There is a need for different procurement methods for different things. There are clearly some

products where the Federal Government probably needs to fund

the early research in order to get it done but there are also other

products and other capabilities like ours where we have done the

vast majority of the research and the development on our own.

What we need is a commitment from the Government to buy the

product and we need a commitment to buy it in sufficient quantities frankly to make it worthwhile. If somebody only wants a few

thousand doses, we are not going to start a large scale manufacturing facility and dedicate 3 to 4 months of manufacturing capability

to make a few thousand doses. If they want 100,000 doses, that

starts to get economically reasonable. If they want 200,000 doses,

it makes a lot of sense. For us to go into future products or other

companies like us to go into future products, you need to state up

front what is really the need of the Government. They have told

us they want an anthrax antibody but never told us how many

doses they really want, never told us what schedule they really

want it on and so we are left in a quandary of how we develop this

product. We have other pharmaceutical products competing.

Mr. SHAYS. Do you think they have told other companies what

they want?

Dr. DAVIS. No, no. I don’t think they are being disingenuous

here, I think they are in a quandary about what they want or

maybe they know and haven’t specified. The RFP asks us to bid on

prices for doses between 10,000 doses and 200,000 doses. That is

a tremendous difference in how you manufacture.

Mr. SHAYS. So you give them a bid at 10,000 and a bid at 50,000,

a bid at 100,000, a bid at 15,000.

Dr. DAVIS. That is exactly what we have done.

Mr. SHAYS. So what is difficult about that?

Dr. DAVIS. The problem is that the manufacturing needs to be

planned 12 to 18 months ahead of time.

Mr. SHAYS. That is another issue but the bidding issue isn’t

there.

Dr. DAVIS. No, we can bid. It’s very difficult to know, however,

if you see that RFP and they are really only thinking about 10,000

doses, we may not want to play. It is simply not enough economic

incentive even if we charge astronomical amounts for 10,000 doses.

Mr. SHAYS. Is it that difficult to do a bid response? In other

words, you price the 10,000 at such an extreme price that you are

not in the running but you give them a price?

Dr. DAVIS. And we have done that.

Mr. SHAYS. So that is not really the issue. With all due respect,

that is not the issue.

Dr. DAVIS. It is an issue in terms of are we going to go after another project like this, are we going to use our own money to do

the research and development on another project if we are not sure

what the Government needs?

Mr. SHAYS. Let me ask you, do you do the research before you

do the bid or do you do the bid before you do the research?

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Dr. DAVIS. In this case, we did the research before the bid because we thought there would be a market. I think in the future,

we are unlikely to do anything more in this area without a clear

indication of what they want in terms of quantities.

Mr. SHAYS. What is the statement you agreed with most and the

statement you disagreed with the most and who made that statement?

Dr. DAVIS. Dr. Fauci I think made the statement that I agree

with the most that this does have to be a partnership between the

Government and industry. The Government does not have the capability to do large scale manufacture of these products. It is very

expensive, takes very specialized facilities but we do need a partner

in the Government so we know what we are doing and when they

want it and what it is.

I think it is hard to say there is a single statement I disagree

with. I think I am concerned that the procurement process for the

BioShield as described is not going as smoothly as some may think.

I think it still has a lot of work to be done to make it more efficient, there are a lot of contract provisions, a lot of indemnity and

liability issues that are a hurdle for companies to be willing to go

across in order to enter this market.

Mr. SHAYS. Thank you.

Mr. MARCHANT. I have a couple questions and they will be questions broached from a freshman in the Congress, just a couple of

elementary questions.

If the Government came to you tomorrow and said we want

200,000 doses of this, how long would it take you to produce them?

Dr. DAVIS. We would be able to start production in approximately

12 to 18 months, but it would take us probably 6 months, maybe

a year to produce all those doses but they would be in a rolling

batch. We could have doses available. For example, if they told us

today they wanted 200,000 doses, we could certainly have doses for

them at the beginning of 2007 and all the doses by the end of 2007.

Mr. MARCHANT. How much public knowledge would be available

about the amount of doses and the antibody that was being produced?

Dr. DAVIS. I would presume, and speak with a little ignorance

here, that the contract would be public and the number of doses

they requested would be specified. The precise structure of the

antibody and the nature of the antibody we have been fairly careful

not to make public for security reasons but some of that would depend on the Government’s desire to keep it secret or not.

Mr. MARCHANT. From someone that thinks the Government or

some entity has an antibody for any of these diseases can be introduced in any form in the water system, through milk, etc., do you

feel the American citizen has a security that there are vaccines,

antibodies and things available immediately that can be introduced

that can combat these things or are they aware that we are studying this?

Dr. DAVIS. I think it depends on the particular agent you are

talking about and the particular means of which the product is distributed and how you can treat it. In many cases, there are inadequate therapies today. In some cases, there are some therapies

which may be adequate in some circumstances and not in others.

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Mr. MARCHANT. Obviously the general knowledge of the cure will

make sure whatever entity decides to introduce this into society

will not introduce that?

Dr. DAVIS. There is a strong deterrent effect one would think

from having stockpile of an efficient deterrent.

Dr. HANNA. The best offense is a good defense in this case, clearly.

Mr. MARCHANT. So if DOD or whatever entity decided they needed to have sufficient vaccine on hand to combat, how prepared are

we at this moment for those diseases that could be introduced?

Dr. HANNA. You are not. For most of them, you are not prepared.

Mr. MARCHANT. You in your case were paid to develop one but

you were not paid to produce the doses?

Dr. HANNA. Let me try to clarify one thing. When we stopped

making it, we closed down our manufacturing facility. We recognize

one of the problems and why we might have been discriminated

against is because our manufacturing facility didn’t exist, so we

went back and said, we will volunteer with private funds to build

that manufacturing facility again and within 18 months we will deliver to you 50,000 doses that meet the specs, that would be FDAapproved again as we did previously for emergency use and we

would get it fully licensed eventually.

I think at that time, they decided it would be better to go to another contractor that had a facility and underestimated the degree

of scientific capability required because you heard Simonson say

that it is not only science, there is a bit of an art to it and it is,

there is an art to it. It is not something that everybody can do. This

contractor is working very hard, I am sure, but they are not able

to accomplish it yet. They will eventually.

Mr. MARCHANT. They own the formula?

Dr. HANNA. We have the patent on the procedure.

Mr. MARCHANT. So they have to deal with you?

Dr. HANNA. We have not discussed that with them but my point

is it would have been better, it would have been smarter to let

them go and have the security of the contract they managed and

release us with a commitment that if we did what we said, they

would purchase from us at a fair price. Then you would have had

both competing with each other. That would have been the smartest way to do it. Instead, they went the contract route, which is the

one they know the best.

All I am saying is we need to start some competition however we

do it, whether we do it with multiple contracts, a contract versus

an independent operation, with a commitment letter. We couldn’t

raise the money without the commitment letter. All we wanted was

a letter saying if you do it, we will buy it at a fair price to be negotiated.

Mr. MARCHANT. Mr. Counsel. Chairman Shays.

Mr. SHAYS. If you both were running the program, how would

you run the program? When I say program, we have agricultural

needs, we have plant needs, animal needs, we have human needs,

so it makes sense you would have three separate tracks, correct,

for each of those?

Dr. HANNA. Yes.

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Mr. SHAYS. How would you run the program differently? If you

were in charge of this program, suppose the United States says, I

want you to run this program, tell me how you are going to run

it, what would you say?

Dr. HANNA. I would do it basically as I described. Let us deal

first with the biological. We know what the agents are. Smallpox

is pretty well covered, we have plenty of vaccine for smallpox.

What we don’t have is vaccine for the other nine agents or some

kind of a therapeutic.

Mr. SHAYS. When you say agent versus therapeutic, with anthrax

there is one element that prevents it from catching hold and another is you have it and now how you deal with it. Is that your difference when you talk about agent versus therapeutic?

Dr. HANNA. I am talking about a vaccine that would protect you

versus a therapeutic that you would take after you had contact and

in some cases, there will be no vaccines. The botulism vaccine they

were talking about was AB. Those are the two common forms. If

anyone was going to use an agent, it wouldn’t be AB. That is the

most common and they know that. They would use C through G

and those are the most difficult to defend against.

I would rank them and I would do just what I said. I would set

up multiple awards. I would either allow companies to come in and

give them commitment letters that if they do it, we will purchase

it or I would set up a contract and an award at the same time. I

would do what we do in the pharmaceutical industry. Oftentimes,

when new projects are started, we set up two, maybe three groups

and let them compete.

Mr. SHAYS. That sounds more expensive to me.

Dr. HANNA. It is a lot more expensive to go with the low bitter

and come up 7, 8 or 9 years later with the vaccines we have seen

from JVAP.

Mr. SHAYS. You are saying, get more companies and individuals

involved, you will get a product sooner, it is going to cost you more,

but we won’t be where we are now with nothing?

Dr. HANNA. How do you compare the cost when you have a situation where you have nothing and still the threat is equal to what

it was 5 years ago?

Mr. SHAYS. What I am hearing you say in a sense is that by

doing it this way, it is taking longer which means we remain vulnerable when we don’t have to remain vulnerable. Your view would

be that we would get there sooner with a better product if we had

multiple competition?

Dr. HANNA. And build in redundancies. That is the thing missing

here, redundancies. You have a JVAP program with no

redundancies backing it. The one redundancy for the anthrax vaccine, they can’t even award it yet. This would be a redundancy to

what is in the JVAP program. You can’t get them to make a decision. I think the problem is the legislation is written to favor the

status quo which is to do it through grants and contracts, and

grants and contracts allow you to give a contract for a particular

project. I am saying set up competition.

In NASA, they had a redundancy for everything, everything had

a backup. That is how they got to the moon and got back but that

was a Presidential mandate that said make it happen. We are

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doing it in the standard way and I think we have to start thinking

out of the envelope.

Mr. SHAYS. I hear you and I understand now what you were trying to tell me. It finally sunk in. Thank you.

Dr. Davis.

Dr. DAVIS. I think that is main thing I would change.

Mr. SHAYS. You are running the program.

Dr. DAVIS. I am running the program. I think the way I would

set it up is one, I would be very clear and they have been, these

are the agents, the terrorist weapons that we are most concerned

about and I would then give a clear indication of what is the

amount of need for product and then I would put out an RFP but

I would streamline the bureaucratic process. I would use simplified

contracting methods, I would try to bring pressure to get the time

lines down to much less.

Fourteen months for RFI to still have a contract negotiation is

a long time and we have been waiting simply for the contract before we even begin our manufacturing. So if you can streamline

that process, you will get these products on line sooner. If you have

a clear, up front commitment, streamlined process, I think you will

find more industry interest in participating in these sorts of programs because then you can do a real measure of the net present

value of this project and understand whether it is worth your investment or not.

Mr. SHAYS. The way counsel is responding to my question to him

as you were talking about what you were saying was that you

would use the more traditional system but make sure there was a

pot of gold and incentive.

Dr. DAVIS. Yes.

Mr. SHAYS. You would have an incentive but you would have a

competitive process and both of you would deal with speeding up

the time process?

Dr. HANNA. Of course.

Dr. DAVIS. Yes.

Mr. SHAYS. When you heard what was said today, is your emotion just disappointment, disgust? The reason I am asking is I am

trying to figure out how I should feel about this. Is it just give me

a break or is it something like, you know what, this is going to

happen, we are vulnerable and you guys are at fault in the end.

Tell me what level of feeling you have right now.

Dr. HANNA. My level of feeling is disappointment. It has been a

lot of energy. I think everybody at this table has done their

darnedest to get the job done. I have known people in the agencies

who came in thinking they could get the job done and then ran into

so many obstacles that they ended up leaving.

We walked away from it and decided we are not going to get involved and do this thing because we couldn’t, we couldn’t get it

done. So it is disappointment. I think the disappointment is that

while there was an urgency and while there was a concern, we

didn’t come up with enough creative mechanisms to get the job

done and we allowed each agency to funnel through their own process, muddle through their own process individually. This is an

interdisciplinary need. You need a lot of people to get this job done.

You need industry, you need the Government agencies, and you

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need people who are highly motivated and have a reason for being

motivated.

I would say disappointment and encouragement that looking forward that you had this hearing and maybe we will get something

done and something will come out of it.

Mr. SHAYS. Let me say in regards to that, we may end up having

a private meeting with the folks I didn’t get to question but we

know we need to do something different and we need to move this

along more quickly.

Dr. Davis, your emotion?

Dr. DAVIS. I think my emotion continues to be a certain amount

of frustration. I believe the agencies are very dedicated to getting

this done. I think their hearts and their minds are in the right

place. I think they have not been able to motivate the bureaucracy

to move and we need to find a way to make this a more efficient

process. Otherwise, you are going to end up with more companies

like mine who are frustrated and simply aren’t going to play.

Mr. SHAYS. Thank you, Mr. Chairman. Thank you both very

much.

Mr. MARCHANT. The subcommittee is adjourned.

[Whereupon, at 3:59 p.m., the subcommittee was adjourned.]

[The prepared statements of Hon. Dennis J. Kucinich, Hon. C.A.

Dutch Ruppersberger, and Hon. Bernard Sanders follow:]

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